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Archive for the 'Outsourcing News' Category

The BPO industry started with call centres. They provided offshore customer support for consumers around the world. Today, the industry is capable of delivering complex processes that go beyond voice-based services. In Australia, businesses are starting to move jobs overseas from sectors such as IT, finance and insurance, and administration.

One of the business processes that have become a popular choice for outsourcing is training. When done right, it can lead to cost savings, increased efficiency, and better management. According to Business2Community, here are five tips that can help you achieve these benefits.

Strategic use of resources. Small and medium-sized businesses can use outsourcing to ease the burden of maintaining staff. This enables businesses to concentrate on their core functions and other revenue-generating tasks. Successful businesses focus on what they do best, and outsource non-core tasks to offshore experts. In addition to that, outsourcing provides an easier way to access expertise that is not available within their company.

Look for service providers with change management expertise. Businesses undergo significant changes when they outsource. They should look for service providers that can help them transition into these changes as smoothly as possible.

Implement a rigorous selection process. Businesses should ask for a detailed written proposal from potential service providers. Through this request, they will find out if the service provider's approach fits their business. By making the right choice, they can avoid costly and complicated problems along the way. Implement a thorough assessment. Businesses should assess if the service provider is willing to take the extra step in delivering the solutions that fit their processes. A responsible service provider will gain an in-depth understanding of their core competencies and be accountable for training.

Establish consistent communication. Communication is very important when dealing with a service provider that's in a different continent. Australian businesses should choose a service provider that speaks their language. Low-cost destinations with a workforce that has excellent English language skills such as the Philippines are beneficial. Businesses can easily conduct regular meetings, updates or request for written reports.

Business processing outsourcing (BPO) is steadily becoming the norm. Outsourcing deals can reduce costs, provide access to a new talent pool, and enable businesses to focus on core competencies. Like any other contract, outsourcing deals come with risks.

According to an article at Christian Today Australia, here are four tips that will help clients avoid the "high-tech equivalent of a bad marriage and costly divorce".

Don't focus on the bottomline. The main driver for outsourcing has always been cost savings. However, scrimping on investments can limit options for productivity and innovation. Investing in emerging technologies and services are important. This helps your company to keep abreast of changes in the marketplace, as well as get ahead of the competition.

Teamwork. An outsourcing contract is not an automated fix. Both the client and the service provider need to work together for a successful outsourcing relationship. Clients need to practice good governance, while service providers need to show accountability. Both parties need to work together to ensure that goals are met and agreed service levels are delivered. Collaboration also fosters innovation and continuous improvement.

Invest in experience. The most inexpensive option is not always the best solution. Clients should take the time to scout several service providers. They should look at experience and skills. They will avoid a lot of frustration by choosing a service provider with offshore agents they can relate to. The Philippines has proven itself as an outsourcing destination because majority of its workers are fluent in English.

Go with the flow. In the business world, change is inevitable. There will always be emerging trends and economic events that may have an impact to your business. Businesses should invest in new technologies and services. Yes, these may change some tried-and-tested processes, but these can also lead to something better.

In an article published at computerweekly.com, Gartner, a global market analyst firm, lists nine steps that can help clients make bad outsourcing deals good.

Assess the outsourcing deal. Clients should identify the impact of the outsourcing contract, investment required to fix issues, and prioritise solutions. Services, finances, and agreement with the service provider should be addressed.

Identify goals for improvement. After a thorough assessment, clients should determine the goals for improvement. These include financial requirements, resources needed to fix the problem, necessary changes to improve governance, service levels, and scope of work. Once these are identified, the steps needed to achieve these goals are then defined. Prioritise goals. New goals should be prioritised by the client and service provider. Both sides must agree on these changes and how they are going to be implemented.

Escalate. An escalation plan is developed to determine who should be involved in which goal. As part of the process, both sides should seek approval at the right levels. Aiming too high may not get the right action and aiming too low won't fix the issue.

Have a client executive. A client executive must be assigned to ensure that changes are implemented properly and on time. The client executive should be in place at the start of the process.

Review meetings. The client and service provider should hold monthly meetings to review and change the plan. The updated plans are then disseminated to all stakeholders. New issues may arise when changes are made, so long-term commitment from both sides is necessary.

Have regular updates. A list of updates must be made for the stakeholders. This covers issues and processes that were tackled in the plan. It should also have complete details and be given at the right time. Tackle personal issues from both sides. Implementing any change requires cooperation and motivation from both sides. The client and service provider should resolve any issues or differences. Once this is done, the plan will be much more manageable.

Implement a risk management plan. Changes to an outsourcing contract can be risky. Clients can reduce or manage risks by implementing a comprehensive risk management plan.

Cost reduction has always been the leading driver for outsourcing. However, outsourcing contracts that are built to reduce costs and risks also limit options to improve labour productivity. As a result, they can lead to "highly controlled mechanistic systems that only create robotic behaviors," according to management consultant Margaret Wheatley.

Saving money is necessary but controlling costs is not sufficient to create value for customers and stakeholders. According to ISG-one.com, here are top five ideas that can help you increase productivity when outsourcing.

Clear outsourcing objective. Businesses should design an operational model that suits their objectives. To reduce costs, they can focus on economies of scale, labour arbitrage, agile development, demand management, and cloud computing. To increase production, they can turn to process engineering, automation, virtualisation, and resource efficiency.

Measure output and establish a baseline. Businesses that establish a benchmark for costs and service levels gain a better view of their overall performance. This can be done by finding out how resources are utilised and measuring output. Align interests from both the demand and supply. Clients and the service providers should have a clear understanding on who profits from greater productivity. Outsourcing contracts that include incentives and service levels steer both parties at the same direction, share the benefits, and maintain focus on improvement.

Encourage the right behaviour. The key ingredient for success is still an efficient workforce. To improve productivity, businesses should select, empower, and motivate the right employees. Outsourcing contracts should foster collaboration, innovation, purpose, and continuous improvement. Good contract governance. A successful outsourcing relationship is a two-way street. Clients should have a proactive role and manage their contract efficiently. This reduces service level errors and cumulative costs that affect both the client and service provider.

The benefits of outsourcing are well-known. Businesses can save money, access higher level of skills, and increase productivity. However, like all business decisions, outsourcing must be carefully analysed.

According to an article at CIO Today, here are the important steps to take to find out if outsourcing fits your business:

Determine if outsourcing will provide the financial goals that you are vying for. Perform an initial cost/benefit analysis. This will identify areas that can potentially benefit from the deal, and the costs that may arise to support it.

Ask for feedback from other businesses or colleagues in your industry. Find out what they experienced from outsourcing, particularly the benefits and pitfalls. Executing, maintaining, and even terminating an outsourcing deal triggers significant changes that impact your business.

Interview potential service providers. Find out if they offer the services you are searching for. Check references. Take a closer look at their experience in the industry. Apart from delivering the services you want, they should also have an understanding of your culture.

How to Plan for Outsourcing

Outsourcing can be a cost-efficient solution for any business. However, like any other business transaction, outsourcing demands careful planning for it to work.

Here are the important factors that businesses should remember when planning to outsource:

Be clear and concise. Clients should prepare a proposal that has all the necessary information. This includes organisational goals, services they require, timetable, and service level requirements. It should also contain the current status of the business, from staff to budgetary constraints.

Negotiate a contract that fits your business. Your service level agreement should specifically indicate what you and your service provider are responsible for, and the timeframe for delivery.

Consistent communication. To get satisfying results, clients should always communicate with their service provider. Be clear on your expectations, discuss key issues, appoint a project manager, and provide regular updates. An outsourcing arrangement will not automatically work smoothly over an extended period of time. It should be driven and maintained by the client and the service provider.